In an interview with CNBC media firm, David Rubenstein, co-founder and chairman of the Carlyle Group’s private equity firm, said Thursday that he believed cryptocurrencies would remain part of the financial space for years to come and that there were concerns about rejected by a growing asset class would fade.
Rubenstein stated that, while not investing directly in digital assets, he has personally invested in companies that facilitate cryptocurrency trading.
“I did that partly because I think it’ll stay here. The cryptocurrency is not going away, just like gold is not going away, ”said Rubenstein.
Rubenstein’s comment comes at a time when Bitcoin and other cryptocurrencies were tumbling in values. On Wednesday May 19, the price of Bitcoin fell more than 30% to around $ 30,000 per coin. The leading cryptocurrency later made up some of those losses, trading at around $ 41,000.
“It has its ups and downs and yesterday was not a good day,” said Rubenstein, referring to the collapse on Wednesday. “But that goes for anything that’s relatively new, and I don’t think you’re going to see anything like crypto going away and going. It’s here, ”said the US billionaire businessman.
Bitcoin and other cryptos exchanged their prices after the U.S. Treasury Department called for stricter compliance with crypto regulations by the IRS (Internal Revenue Service Tax Collection Agency) on Thursday, May 20.
While Rubenstein is promoting Bitcoin’s long-term viability, some people are skeptical of the leading crypto. Earlier this month, Charlie Munger, vice chairman of Berkshire Hathaway Inc., said Bitcoin was “gross and against the interests of civilization”.
Rubenstein said whether people think Bitcoin and other crypto assets are “right or wrong” that it is clear that there is an appetite (demand) for an alternative to the current financial system.
“It’s here because people in the market want something other than just the traditional currencies that we had,” added Rubenstein.
Gary Gensler, chairman of the Securities and Exchange Commission, said earlier this month that crypto investors are worried about whether the U.S. government will enact regulations on cryptocurrencies that Bitcoin requires greater investor protection.
Rubenstein spoke about the prospect of further regulations, stating that the idea that “the government can prevent cryptocurrency from being something investors want is currently unrealistic”.
Crypto as an alternative to fiat currency systems
The reference to Bitcoin as an alternative to current financial systems leads to its core value proposition, which is another option for traditional financial infrastructure.
Cryptocurrency offers another option that is fundamentally different from the existing financial system and offers different advantages and tradeoffs.
A government agency does not issue Bitcoin
Unlike several inflationary fiat currencies (which are becoming increasingly popular), Bitcoin is disinflationary (if inflation decreases over time) and will eventually stop when the last bitcoin is mined in 2040. This disinflationary feature of Bitcoin attracts many people and investors who are not interested in the inflation-related value erosion caused by governments’ fiat currencies.
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